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Magnuson Hotels has launched in the UK, claiming to offer UK hotels a “proven performance in global distribution, without hefty conversion costs”.
The company, which is headquartered in London, has over 65,000 hotels in its booking system worldwide and outperformed the US market by three times last year, when the UK hotel industry was in lockdown.
Its hotels typically see 50% of business direct, 30% through OTAs and 20% through the GDS.
According to Magnuson Hotels’ CEO, Thomas Magnuson, one of the “key aspects we look at in the local marketplace is the proper positioning of the hotel”.
He said: “UK hotel owners are experienced and they continually renovate. Where we’re very successful is looking at hotels which are incorrectly positioned as economy hotels when they should be midscale hotels. In a stabilised environment the best that hotel can do is a high occupancy, low-rate strategy, which burns out the property and has high labour costs.
“What we generally do is convert properties from an incorrectly positioned and under-priced rate range to a midscale or upper-midscale product, earning another £15 to £20 of average rate. This is accomplished without a PIP, just a highly supported strategy to leverage the owner’s existing operation.”
He added: “Before the pandemic guests were moving away from the cookie-cutter brands, influenced by companies such as Airbnb, looking for more interesting experiences which allowed them to connect with the location they were visiting. This trend will continue as people return to travel and search for lodging with more character and less corporate standardisation.”
Chairman Melissa Magnuson added that the company had delayed its business model in the UK because they “had a lot to learn about the differences between the UK and US markets”.
She said: “In the UK there is an investment – savvy approach, but often there are also generations of family ownership with pride in the heritage of the hotel as well.”
The group aaid it has built on its experience last summer during the pandemic, when many owners under the Travelodge brand in the UK were given the option to change brands.
Magnuson said: “We had some interesting conversations with owners, but it was the wrong time in the pandemic for people to switch. With no guests and no clear idea of when business would resume, Travelodge landlords were reluctant to make a change. Now, with the vaccine rollout underway a return to travel in sight and, with a fresh perspective on the bottom line, owners want to maximise returns.”
